Humbly, I would like to admit something. My wife and I made a chunk more money in 2008 than we did in 2007. Normally, this should be a good thing. Here's my problem/concern: I have a child in 11th grade and child in 10th grade (and also one in 6th grade, but less of a concern right now). Both of them have some sense that they would like to go to college. Making more money, even for me, often means qualifying for less sorts of need-based financial aid.
David Rosen and Caryn Mladen, authors of Free $ for College for Dummies, offer some great advice for folks who make over $100,000 a year and still would like some help. Here are some of the factors that could work in your favor:
David Rosen and Caryn Mladen, authors of Free $ for College for Dummies, offer some great advice for folks who make over $100,000 a year and still would like some help. Here are some of the factors that could work in your favor:
- You have other children in college. Yes, this makes a difference. The more children that you have in college, the more FAFSA and the federal government takes that into consideration. Yes, you should have decided fifteen years ago to space your children closer together.
- You are supporting other people (such as your parents). If you are also supporting your parents, your wife's parents, or children from a previous marriage, this all factors in. This support, of course, must be verifiable in some way. Saying that it is all cash support would be a bad bet.
- You have substantial debt. The government, truthfully, is less interested in how much money you made last year and is much more interested in your net worth. If you have significant debt, this should work in your favor. Of course, if you have significant debt, you should be concerned with the current economy.
- Your child is not a dependent. If your child is truly independent, then your income should not be factored in at all. Some ways for them to be considered independent include having been in the military, getting married, having a child, or a significant time living out of your house. How does this affect you? If they are independent, you can likely still give them cash gifts to help with college. However, I strongly encourage you not to try to scam the system. If you are found out, bad things can and will happen. Easiest way to be found out? Cash gift equals cost of tuition. Also and importantly, there are other IRS rules about cash gifts. Consult with your tax preparer.
Without being to cynical, that is at least one problem I will not have to worry about.
Posted by: Bruce | December 11, 2010 at 01:52 PM